Did Crowdfunding Become A Key Player In The Financial Industry?

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Crowdfunding has been a success story in almost all its platforms across the globe and as it penetrates Southeast Asia, it is poised to have the same outcome. The financial industry has had a lot of ups and downs but it largely remains one of the most important issues people deal with on an everyday basis. It ripples out to a lot of areas in their life.

People sometimes measure success in their career with how much money they make. Their dreams of owning a house or a car or setting up a business also has a lot to do with money.It can be the amount that they have or the amount that they can borrow from the bank. They also need to financially plan for uncertainties in life such such as unexpected health conditions or job loss.

With almost everything having to do with money – people tend to look for ways to get around it as easy and as uncomplicated as possible. This is where crowdfunding comes in to complement the more traditional ways people approach finances and money. It usually takes away the arduous task of preparing a lot of documents to ask a bank for a loan.

People prefer simplicity

The mother of all invention is need but what perfects these products is the need to simplify it for people to understand. Banks started so people would have a safe place to store their money and for people to have a place to borrow money. And over the years, the banking industry has been developing stringent measures before you can take out a loan.

This is a necessary change so they can protect the interest of people who owns the money they are loaning. They are just circulating the money entrusted to them by depositors as well as investors. Crowdfunding has less red tape and much simpler to navigate especially for first timers in taking out a loan.

Crowdfunding would require project initiators to present their business idea or product so investors and other potential backers would be able to understand the concept behind it. Crowdfunding companies would have different measures in place to ensure the authenticity of the campaign. This is to help protect all parties involved – the donors, the platform as well as the project initiators.

But the process is not as complicated as the ones being done by the banks and this is one of the primary reasons crowdfunding became a key player when it comes to financial need of consumers. It takes out the complexities of borrowing money and makes it easy for people to raise the funds they need. Of course you can never be sure if you will get your target but the process itself is simpler

One reason for this is that crowdfunding relies on a lot of people to make their own decisions whether they would invest or donate to a specific project. The decision belongs to the donor and not the crowdfunding platform. Banks on the other hand relies on specific measures to know if they will use the money entrusted to them and loan it to someone else.

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This article is written by the Crowdfunders Editorial Team. Crowdfunders.Asia is Asia’s leading portal on crowdfunding, property, start-up and business related news operated by CoAssets.com. CoAssets.com is South East Asia’s first real estate crowdfunding site. If you wish to contribute your story, you may write to [email protected]

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